Insurance Hypothesis Tells Us That

question 5

Multiple Choice

Insurance hypothesis tells us that:

• A)investors can insure themselves against loss by investing in a diverse investment portfolio should an individual investment fail.
• B)investors will demand that financial reports be audited as a way of insuring against some of their loss should their investment fail.
• C)the entity can take out insurance to protect itself from such risks as employee or management fraud which can lead to material misstatements in the financial statements.
• D)investors cannot insure themselves against loss when investing in an entity.

---

Definitions:

Language

A system of symbols, signs, sounds, and rules used by humans to communicate thoughts, emotions, and information to others.

Lorenz

Refers to Konrad Lorenz, an Austrian zoologist, ethologist, and ornithologist known for his foundational work in ethology, the study of animal behavior.

Intraspecific Aggression

Aggressive behavior directed towards members of the same species, which can occur for reasons such as competition for resources or mating.

Emotional Intelligence

The capacity to be aware of, control, and express one's emotions, and to handle interpersonal relationships judiciously and empathetically.